Challenges Facing

Public Sector
Internal Auditing
Thomas Warga, CIA
Chairman of IIA
May 4, 2006

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 Top Ten Challenges

1. Adequate internal audit staffing

2. Adequate compensation
3. Ability to measure performance
4. Adequate technology resources
5. Ability to report results timely

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 Top Ten Challenges

6. Ability to benchmark
7. Promoting effective governance
8. Ability to establish risk base plan
9. Ability to contract for experts
10. Adequate resources for
continuing education (CPEs)

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Potential Solutions

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 Adequate Internal Audit Staff

• Demonstrate impact of staffing shortfalls

• Demonstrate potential added value from audit
services
• Identify strategies for force multiplication
– Share resources
– Co-source
– Leverage technology
• Long term –increase supply
– promote careers in auditing

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 Adequate compensation
• Low comp – difficult to attract and
retain talent and difficult to motivate
• Promote regular compensation
surveys/adjustments
• Alternative comp strategies
– Performance bonuses
– Non monetary recognition/benefits
– Time-off awards

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 Measure Performance
• Survey stakeholders
• Benchmark with other organizations
• Use results based measures
• Consider measuring
– Stakeholder satisfaction
– Audit cycle time
– Cost savings and increased revenue

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 Adequate Technology
Resources
• Share resources with other
governmental agencies
• Co-source or outsource IT audits
• Risk assessments for resources

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Reporting Results Timely

• Identify cycle time drivers

• Benchmark with other IA functions
• Measure progress
• Reward results , on-time
performance
• Reporting writing training

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 Ability to benchmark

• IIA GAIN benchmarking tool

• Network with other government
agencies
• Benchmark against non-public
sector

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 Promote effective
Governance
• Benchmark against public sector
governance within and outside
India
• Use best practices as benchmark
• Report on gaps
• Establish working relationship with
board or governing body
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 Risk based audit plan

• Annual risk based assessment of

audit universe
• Identify and measure 3 to 5 risk
factors
• Use numerical ratings
• Use impact and probability

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 Contract experts

• Use of content experts or

specialists to supplement audit
staff
• Borrow from another agency or
area not under review
• Hire expert or specialist Vs short
term contract

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 Resources for CPEs
• Innovative approaches to training
• Cut travel costs -bring trainer to staff
• Professional associations events and
meetings
• On-line training from around the world
• In house training

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 Other Challenges
• Support of senior government
managers and executives
• Providing non-audit services
• Communicating value and mission of IA
to boards, appointed and elected
officials
• Cooperation of officials during review
• Political pressures during reporting
process
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